How Chatbots Can Help Retailers Transform Stores Into ‘Experience Centers’
Conversational agents can answer shoppers' most common questions and reduce friction — freeing up associates and store space for more compelling experiences, says ChargeItSpot CEO Doug Baldasare.
As retailers prepare for back-to-school sales and the fall shopping rush — which 70 percent of consumers plan to shop in-store for — removing friction from the retail experience is paramount: How can brick-and-mortars serve shoppers while minimizing the frustrating hallmarks of the busy season like long lines and over-taxed store associates?
There is no one simple fix, but initiatives like chatbots, mobile checkout, and more can help, ChargeItSpot CEO Doug Baldasare posits — speeding up the payment process and answering the questions that customers have in real-time.
“The innovations that really improve store experience focus around tangible pain points for the consumer,” Baldasare said. “I think [one solution] is that retailers will look to the stores to be more of an experiential place for consumers, and hopefully they will able to cover the more basic FAQ-style questions via a chatbot, for example.”
GeoMarketing: What are some of the best applications of conversational agents/chatbots for retailers? How can they be used to boost engagement and foot traffic?
Doug Baldasare: Here’s an interesting stat: It appears that about 20 percent of [customer] inquiries generate 80 percent of the volume of total queries — and I think one of the best uses for chatbots is to address this. The idea is to ask, “where the most common, questions, concerns, areas of confusion for consumers” — and then build conversational agents or chatbots to address them.
I think the outcome of that is that retailers will look to the stores to be more of an experiential place for consumers, and hopefully they will able to cover the more basic FAQ-style questions via a chatbot. I think that removes friction from the shopping experience; it makes the shopping experience in the store less administrative, and as a result allows the consumer and the retailer to focus more on experience in the physical space. Some stores are beginning to eliminate counters, because a chatbot is effectively a virtual customer counter, right?
It’s all about trying to remove friction from the consumer experience, and I think [using chatbots in this way] is one example of that.
We’ve written about the transformation of the “connected store” as retailers try to turn brick-and-mortar locations into showrooms that offer something shoppers can’t get on Amazon. What are some examples of compelling in-store experiences that you’ve seen? And how do conversational agents/chatbots play a role in this?
The innovations that really improve store experience focus around real, tangible pain points the consumer has. One of our clients speaks broadly on this topic: The head of the innovation lab for Neiman Marcus, his whole focus is on the fact that you’re not going to have sustainable, profitable innovation unless you’re really solving a true problem for the customer.
Many retailers are removing their cash routes and moving towards mobile checkout. This is addressing a [fairly common] problem: The consumer finds what they want, but now they’re waiting in a line to pay. That’s not fun for the shopper, and it also increases likelihood of abandonment.
I think that mobile checkout is a very straightforward and simple solution that adds something for both the retailer and the consumer.
The other example that I would point to is return — where someone can order online and return to the store. That saves a lot of trouble for the consumer in that they don’t have to package it up, find a FedEx or UPS location, go there, drop it off… Obviously, it’s easier to just bring it into the store and get the credit right back on your card in the moment.
This is also good for the store because it drives consumers into a shopping environment where they might choose to buy something; it’s an innovation that can add to the experience for the consumer while also driving profitability for the retailer.
And then finally, as I said, I think that [addressing] consumers’ most commonly asked questions or problems via a conversational agent or [something interactive] in stores can be a huge step forward for retailers as well.
Are there any pitfalls for retailers to avoid when implementing this technology, in your experience? How can marketers drive engagement this way without losing the “human touch” entirely?
I think that messaging about what the chatbots can do and making that experience [easy to understand] for the user is really important.
Additionally, I think it’s important for brands [to make sure they don’t] lead the consumer to believe the chatbot can solve all the problems; at this point, this is not truly AI. This is a sophisticated look up system that appears to be AI.
Right — when shoppers understand what chatbots are intended to do and what they can answer, it seems to be a more seamless experience. For example, Cover Girl developed a chatbot modeled after one of their influencers called Kalanibot; when consumers knew they were talking to a bot to answer specific questions, the Kalanibot reportedly drove 14x the engagement of the actual influencer.
That’s a good example. The other thing I’ve been thinking about is that I believe recommendations are going to be big: If chatbots can build data on what an individual consumer is concerned with — or past purchase history, even — then that improves the experience, and it can help with targeting. For example, if [brands] can incorporate chatbots into a mobile interface and initiate sessions when someone has a particular retailer’s app open when they’re nearby a store, that can be a good way of driving traffic.
I’m sure there’s going to be plenty to see on that front in the coming months and years.